Ray Dalio’s financial recommendations

Ray Dalio’s financial recommendations, particularly for millennials who have grown up during the Great Recession, was put forward in an interview recently published by yahoo finance.

Ray Dalio’s financial recommendations for millennials is to try not to be scarred by the economic downturn

Many millennials experienced a breadwinner losing their job. Some may have been forced to leave their home due to bank foreclosures or tighter finances could have meant downsizing to less expensive rental accommodation. Millennials have embraced the You Only Live Once (YOLO) mantra. They are also rejecting capitalism.

“Ray Dalio’s financial recommendations for millennials is to try not to be scarred by the economic downturn”

RAY DALIO

One of Ray Dalio’s financial recommendations for millennials is to try not to let the experience of economic hardship make you lose your bearings

The last experience could stick in your mind and hold you back. “My parents went through the Great Depression and they missed out on the boom” said Ray Dalio.

You can’t make investments without savings so think about how much you can save is one of Ray Dalio’s financial recommendations

Savings goes against the YOLO culture of young adults but “savings is freedom and security,” said Ray Dalio. The best way to think of saving is to work out how much money you spend each month then compare those savings with your monthly expenses, according to Ray Dalio. You will then be able to calculate how many months you will be able to meet your expenses, obligations without income.

“My parents went through the Great Depression and they missed out on the boom”

RAY DALIO

Effective saving is next on the list of Ray Dalio’s financial recommendations

Think about where you should put your savings into,” said Ray Dalio. Cash, which many would think is the least risky investment is not the least risky investment.

“Cash, from a volatility perspective, is the worst form of investment over a period of time” said Ray Dalio.

“You can judge that by valuing the rate in relation to the after-tax income you are going to earn” added Ray Dalio

“If capitalism doesn’t work for the majority it is going to be threatened, the same is true about democracy” – Ray Dalio

Ray Dalio’s financial recommendations also include moving into other assets that will do better over a period of time

“When you do that diversify well, pick different countries, asset classes” said Ray Dalio.

Ray Dalio’s other financial recommendations include being cautious about debt

When you think about debt ask if that debt is going to help your savings and produce an income. Buying real-estate produces forced savings. Debt for consumption is not good. Debt for income, you need to ask whether the cost of servicing debt will be more than income generated from the asset. Also, do the opposite of your instincts, buy when nobody wants to buy sell when nobody wants to sell.

So Ray Dalio’s financial recommendations are about making capitalism work for the many. “If capitalism doesn’t work for the majority it is going to be threatened, the same is true about democracy” said Ray Dalio. Could Ray Dalio be planning to run for Presidency? If so, he would probably win.

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